London open: Stocks rise but gains capped by Covid worries

London stocks rose in early trade on Monday, helped along by strength in the telecoms sector, but gains were unspectacular amid worries about rising Covid cases and tightening restrictions across Europe.

At 0845 GMT, the FTSE 100 was up 0.3% at 7,247.19.

Richard Hunter, head of markets at Interactive Investor, said: "There is some return of risk appetite in early exchanges, with the likes of the banks, airlines and leisure stocks recouping some of last week’s falls, again underlining the fact that investors are still caught in two minds given the current backdrop."

Despite the positive start, concerns about tightening Covid restrictions in Europe were growing, with Austria implementing a nationwide lockdown and Germany potentially set to follow suit.

CMC Markets analyst Michael Hewson said: "The realisation that a number of countries could see another disrupted Christmas hasn’t gone down well in a number of European countries with civil disorder breaking out in a number of countries across the region, with Dutch police firing on demonstrators in Rotterdam, while in Austria protests broke out in Vienna over the governments mandating compulsory vaccination from 1st February next year.

"There’s also been protests in Belgium, Croatia and Italy over the modest tightening of restrictions there as a number of European countries run the risk of losing control of the virus."

Meanwhile, Brent crude was trading below $79 a barrel for the first time in eight weeks amid concerns about the impact of Covid restrictions.

In equity markets, BT Group and Vodafone rallied after private equity firm KKR made a $12bn takeover approach to Telecom Italia.

In corporate news, BHP gained after it and Woodside Petroleum signed a AUD$40bn petroleum merger deal, which will see Woodside acquire BHP’s petroleum assets in return for a 48% in the combined company.

Diploma advanced as it reported a 68% jump in full-year pre-tax profit to £141.9m amid improved demand and backed its outlook for FY22.

Marks & Spencer was on the front foot following a report that US private equity firm Apollo Global Management is considering a buyout.

JTC was boosted by an upgrade to ‘hold’ from ‘sell’ at Shore Capital.

On the downside, Hochschild Mining shares tumbled nearly 60% after it said it would fight what it called an "illegal" plan by Peru to close two of its mines on environmental grounds.

Market Movers

FTSE 100 (UKX) 7,247.19 0.33%
FTSE 250 (MCX) 23,540.77 0.21%
techMARK (TASX) 4,553.73 0.21%

FTSE 100 - Risers

Royal Mail (RMG) 514.40p 3.19%
London Stock Exchange Group (LSEG) 6,832.00p 1.91%
Darktrace (DARK) 536.50p 1.71%
BT Group (BT.A) 162.95p 1.43%
SSE (SSE) 1,618.00p 1.35%
Aviva (AV.) 396.90p 1.30%
Associated British Foods (ABF) 1,924.50p 1.29%
International Consolidated Airlines Group SA (CDI) (IAG) 150.38p 1.27%
Vodafone Group (VOD) 115.00p 1.21%
NATWEST GROUP PLC ORD 100P (NWG) 223.10p 1.13%

FTSE 100 - Fallers

Polymetal International (POLY) 1,444.50p -1.93%
Halma (HLMA) 3,109.00p -1.77%
Johnson Matthey (JMAT) 2,207.00p -1.21%
ITV (ITV) 119.40p -1.08%
Intertek Group (ITRK) 5,204.00p -0.80%
Persimmon (PSN) 2,768.00p -0.65%
Kingfisher (KGF) 320.70p -0.56%
Pearson (PSON) 626.80p -0.51%
BAE Systems (BA.) 562.20p -0.50%
CRH (CDI) (CRH) 3,652.00p -0.49%

FTSE 250 - Risers

PureTech Health (PRTC) 335.00p 4.36%
JTC (JTC) 889.00p 3.61%
Harbour Energy (HBR) 385.40p 3.60%
Diploma (DPLM) 3,310.00p 3.31%
Marks & Spencer Group (MKS) 247.40p 2.74%
Network International Holdings (NETW) 326.30p 2.35%
Investec (INVP) 380.70p 2.17%
Spire Healthcare Group (SPI) 247.50p 1.85%
SSP Group (SSPG) 258.40p 1.73%
Rank Group (RNK) 153.60p 1.72%

FTSE 250 - Fallers

Hochschild Mining (HOC) 70.00p -57.47%
AO World (AO.) 127.90p -2.74%
Indivior (INDV) 248.20p -1.90%
F&C Investment Trust (FCIT) 927.00p -1.28%
Centrica (CNA) 66.70p -1.19%
National Express Group (NEX) 225.60p -1.05%
Capita (CPI) 44.77p -1.00%
Watches of Switzerland Group (WOSG) 1,402.00p -0.99%
Energean (ENOG) 876.50p -0.85%
Games Workshop Group (GAW) 9,530.00p -0.73%